Trapped By Fast Cash: One Woman’s Escape From The Payday Loan Debt Spiral

Sabrina Leonard’s life has grown more difficult over the past two years. The 49-year-old Spring Hill, Kansas, resident has watched her rent, utilities and grocery bills steadily rise while her paycheck has remained the same.

Things came to a head in early 2025. She was $600 short on rent, $700 behind on her car payment and facing another $500 due in medical bills. On top of those bills, groceries were costing around $300 a month. Leonard says she lives modestly: no vacations or splurges. Still, with less-than-perfect credit, her financial options were limited, leaving her with few places to turn.

“Unfortunately, I made the mistake of going online and falling into that rabbit hole of payday loans,” she says.

Leonard knew it was a risk. Her father had warned her about payday loans years before, when she was just a teenager.

“I can remember asking my dad, ‘What are those places? I don’t understand how that works?’ and he just would always tell me, ‘You don’t ever want to go do that. They will gouge you.’”

But in April 2025, with bills mounting, Leonard went online in search of help and chose a payday lender from the many available. When she borrowed $1,200, the lender explained that the interest rate was 400%, but reassured Leonard that it would only apply if she missed certain payments.

“I needed the money right then to pay my rent and pay my utilities,” she says.

Two weeks later, the first $194 withdrawal hit her account. Two weeks after that, another withdrawal for $209. That’s when she realized she couldn’t keep up. Within a month, she took out another $1,500 payday loan just to cover the first one.

Suddenly, her father’s warnings about payday loans took on new significance.

Leonard’s story is not unique. Stagnant wages and high inflation have left many households struggling to make ends meet and forced them into desperate choices. When traditional loans are out of reach due to poor credit or high debt, options like payday loans can feel like the only lifeline. Unfortunately, these quick-cash solutions usually come with sky-high interest rates and long-term financial consequences, including trapping people like Leonard in an endless cycle of debt.

The financial danger of payday loans

Payday loans are small, short-term loans with astronomical interest rates of 400% APR or more. They’re called payday loans for a reason: They are designed to be paid back the next payday, either with a post-dated check or via direct withdrawal from a bank account. When facing an unexpected bill or emergency expense, borrowers often genuinely believe they’ll be able to pay back the loan on time.

“I thought, I’ll have a little extra money, I’ll put it toward this,” Leonard recalls. “I’ll pay it off sooner. I won’t end up paying that 400% interest that’s going to accrue on it. But at payday, you’re not ending up with that extra amount to pay toward it [the loan].”

For borrowers who can’t pay back the loan after two weeks, lenders will encourage them to roll one loan into another, and the payday loan debt cycle begins.

“There are additional charges and fees and interest that come into play,” says Austin Kilgore, analyst and director of corporate communications for the Achieve Center for Consumer Insights, a think tank for the home lender Achieve. “What can start out as a small loan amount, because of the high interest and high fees, can really quickly spiral out of control and make a bad situation significantly worse.”

These days, payday lenders aren’t just at physical locations in strip malls — you can also find them online or with brokers who sell borrower applications to multiple third parties. Lenders advertise them as an easy fix for emergencies, but the reality is much darker.

“The model the industry uses to make payday loans relies on finding a few people who can get trapped in debt spirals,” says Adam Rust, director of financial services at the Consumer Federation of America. “Most of the profit occurs from just a handful of borrowers who might take out five, seven or 10 loans before they are completely financially bankrupt.”

Americans took out more than 20 million payday loans in 2022, totaling nearly $8.6 billion, according to the Center for Responsible Lending (CRL). That number doesn’t even account for the exploding online lending market, which has made taking on these high-interest loans easier and faster than ever before.

“A lot of these are online, and [consumers] can just go on an app,” says Henry Williamson, counseling manager at Cambridge Credit Counseling. “They just put in their banking information, and [lenders] approve a $500 loan. So [consumers] will take out multiple loans, and so they keep getting approved.”

What can start out as a small loan amount… can really quickly spiral out of control and make a bad situation significantly worse.

— Austin Kilgore
Analyst and director of corporate communications for the Achieve Center for Consumer Insights

Inside the costs of payday loans

The Federal Trade Commission reports that payday lenders typically charge $10 to $30 for every $100 borrowed. And payday lenders are skilled at convincing borrowers to roll over their loans when high, unmanageable fees strike. Here’s how that 400% APR plays out in real dollars on a loan rolled over for a year. (These figures don’t account for other potential fees like late charges or insufficient funds penalties.)

This means a $1,000 loan could cost nearly nine times the amount you originally borrowed after a year of rollovers.

The psychology of payday loans

Payday loans don’t just happen because someone is careless with money — the industry survives on panic and pressure.

“I would argue that some of the payday loan marketing material is designed to capitalize on the very sort of understandable emotional desire to have this thing dealt with quickly,” says Christine Hargrove, clinical assistant professor and assistant director at the Love and Money Center at the University of Georgia. “When people are in that setting, they’re dealing with a lot and already maybe are not as financially literate. They have problems they’re trying to solve and are really not thinking clearly.”

For Leonard, who worked with a payday broker, that urgency was amplified by the flood of phone calls, texts and emails she received within five minutes of filling out the application.

“We’re willing to loan you $2,900, we’re willing to loan you $3,000, we’re willing to loan you $1,500,” she recalls being told. “All these people are willing to loan you this money. Right away, you have that relief that, ‘Oh my gosh, I can pay my rent.’”

For many borrowers, the true cost of a payday loan doesn’t sink in right away. A 400% interest rate can seem like just a number — until the payments start piling up.

“What does that even mean? How do you put that in numbers? It seems so ethereal,” says April Lewis Parks, director of education and chief communications officer at Consolidated Credit, a nonprofit credit counseling organization. “It is very difficult to break the payday loan cycle because once they’re stuck in it, they take another payday loan to help pay for everything else.”

The rise of online payday loans has only deepened the problem. The process is fast, easy and most importantly, anonymous. There’s no face-to-face interaction, no judgmental bank teller, no awkward conversation about income or debt, no recognizable car parked in front of a physical storefront.

“I didn’t have as much embarrassment with it by going online as opposed to going to a bank somewhere here or local to try to get a loan,” says Leonard. “I never thought I would be in this position. Unfortunately, I was and am.”

How Leonard escaped the payday loan debt spiral

By August 2025, Leonard owed $2,700 in payday loans. To stay afloat, she took on an extra part-time job, paying about $410 a month toward the loans while her total balance ballooned to $3,094.

“Because of the interest rate, it was costing me more than I was making in my part-time job,” she says. “I wasn’t getting anywhere.”

The lesson she learned from her father in childhood collided with the reality of trying to survive. Desperate, she turned to him for help. It felt like admitting defeat.

“It was really embarrassing to ask my parent for help at my age,” says Leonard. “I felt like I was drowning and couldn’t figure out how to get out of it.”

She laid everything out — the bills, the stress, the feeling of being completely stuck — and admitted she didn’t know how to get out from under it.

Together, they sat down, combed through her expenses, and tried to identify areas where she could cut back. There wasn’t much room to maneuver, but they came up with a plan. Leonard’s father paid off her payday loan with an 18-month 0% interest credit card, and she is paying him $75 from every paycheck until the debt is gone.

“If everything goes right, I should have him paid back in about a year and a half,” she says.

Lessons learned: staying out of the payday loan debt spiral

Leonard is determined not to end up in the same position again. Since taking on her part-time job, she has become much more intentional about how to manage money, and she began working with Cambridge Credit Counseling to help keep her finances on track. Leonard also started tracking every debit card purchase and keeping a written budget so she always knows what’s in her account and when her bills are due.

Starting in December, she’s also getting a roommate, a close friend who has been struggling with rent, too. Leonard feels like she is in a better place now, out from under the pressure of payday loans.

“I know at the end of the day, you do what you’ve got to do to support your family and to have a roof over your head,” she says passionately. “But if there’s any way possible at all, look at all of your other alternatives before you ever turn to payday loans. Because honestly, it’s just a Ferris wheel that you don’t get off of. It just spins and spins.”